Adnan and Tara are partners in a partnership firm which is not registered. Diti is a retailor who sells goods produced by Adnan and Tara's partnership firm on credit basis. Since Diti is unable to make payment for credit

Section 69(2) of Indian Partnership Act 1932, places a bar on the institution of a suit by or on behalf of a firm against a third party if the firm is not registered and the persons suing are or have not been shown in the Register of Firms as partners in the firm. Section 69 bars the very institution of a suit by an unregistered firm or by its partners. Registration is a condition precedent to the right to institute the suit and, therefore, the condition precedent must first be fulfilled before the institution of the suit. If, therefore, on the date of the institution of a suit, the firm is not registered, the subsequent registration cannot validate the suit. The only option left to the Court is to dismiss the suit ( Prithvi Singh vs. Hasan Ali, (1950) Bonn. L.R. 862 ).. A suit by the firm is really a suit by all the partners who were its partners at the time of the accrual of the cause of action and, therefore, all must join in the institution of the suit. Thus, in this case partnership firm of Adnan and Tara, being unregistered, cannot sue Diti.